From the beginning of 2018, Cargotec applies the new IFRS 15 and IFRS 9 accounting standards as well as the amendments to the IFRS 2 standard. More information on the new standards is available in Note 2, Accounting principles and new accounting standards. Cargotec has also aligned the definitions of the equipment, service and software businesses from the beginning of 2018. The data for the comparison period 2017 has been restated accordingly. Cargotec has published a stock exchange release on 28 March 2018 regarding the changes.

Operating profit excluding restructuring costs decreased by 20 percent and amounted to EUR 56.3 (70.6) million, representing 6.9 (8.4) percent of sales. Kalmar's operating profit decreased due to a less favorable business mix, and especially weaker US dollar compared to the euro had a negative impact on Hiab's profitability.

Cargotec's CEO Mika Vehviläinen: Strong development in orders received

Cargotec's second quarter of 2018 was strong with regard to orders received. Orders received grew in Kalmar and Hiab in the second quarter and were 23 percent higher than in the comparison period. Our sales were almost at the previous year's level, but restructuring costs had a significant negative impact on earnings per share. We proceeded according to our strategy in shaping our portfolio by divesting Kalmar Rough Terrain Center and Siwertell, both of which are outside Kalmar's core areas.

We continued to implement our strategy with determination. I am particularly pleased with the service business development in the second quarter, as we were able to increase the orders received there by 16 percent. The performance supports our key strategic goal of achieving EUR 1.5 billion service and software sales in 3-5 years. We also progressed with digitalisation and leadership, our two other strategic focus areas. During the second quarter, we developed a number of solutions that utilise artificial intelligence, as well as advanced analytics to improve eco-efficiency, preventive maintenance and crane balancing, for example. In leadership, we took steps to continuously improving team climates.

One of the highlights during this quarter was Kalmar's agreement to deliver an advanced automation solution to Sydney, Australia, valued at approximately 80 million euros. The order is particularly significant as it is the world's first fully automated intermodal solution for an inland terminal. In addition, Kalmar will deliver a unique digitalised container handling solution with fully autonomous equipment, software and services to Yara's Porsgrunn facility in Norway. The solution enables autonomous, cost-efficient and emissions-free operations of the Yara Birkeland container ship. These orders highlight the technical advancement of Kalmar's solutions and tell about the success of our investments in the automation development.

During the quarter, we took major steps also in sustainability. In May, we announced Kalmar's commitment to reduce emissions in cargo and material handling operations by fostering eco-efficient technologies. According to the commitment, Kalmar's full offering will be available as electrically powered versions by 2021. We believe that our strong investments in eco-efficient technologies will give us a significant competitive advantage in the future, when both our customers and legislation increasingly require low-emission solutions.

Reporting segments' key figures

Orders received

MEUR

Q2/18

Q2/17

Change

Q1-Q2/18

Q1-Q2/17

Change

2017

Kalmar

550

386

43%

983

834

18%

1,555

Hiab

301

279

8%

608

567

7%

1,116

MacGregor

131

136

-4%

255

257

-1%

521

Internal orders

-1

-1

-1

-1

-2

Total

981

800

23%

1,844

1,657

11%

3,190

Order book

MEUR

30 Jun 2018

31 Dec 2017

Change

Kalmar

947

786

20%

Hiab

337

300

12%

MacGregor

503

481

5%

Internal orders

-1

-1

Total

1,786

1,566

14%

Sales

MEUR

Q2/18

Q2/17

Change

Q1-Q2/18

Q1-Q2/17

Change

2017

Kalmar

389

397

-2%

760

761

0%

1,598

Hiab

295

282

5%

571

552

3%

1,084

MacGregor

133

157

-15%

259

316

-18%

571

Internal sales

0

0

-1

-1

-2

Total

816

836

-2%

1,589

1,628

-2%

3,250

Operating profit

MEUR

Q2/18

Q2/17

Change

Q1-Q2/18

Q1-Q2/17

Change

2017

Kalmar

24.5

31.6

-22%

52.4

58.2

-10%

126.6

Hiab

39.4

44.0

-11%

75.5

83.5

-10%

157.0

MacGregor

2.8

-4.3

166%

3.0

-2.7

208%

-5.2

Corporate administration and support functions

-45.4

-12.4

-267%

-56.3

-24.1

-134%

-56.3

Total

21.3

58.9

-64%

74.5

114.9

-35%

222.1

Operating profit excluding restructuring costs

MEUR

Q2/18

Q2/17

Change

Q1-Q2/18

Q1-Q2/17

Change

2017

Kalmar

25.2

32.3

-22%

53.9

60.2

-10%

133.1

Hiab

39.4

44.0

-11%

75.5

83.6

-10%

157.2

MacGregor

2.6

4.3

-39%

2.8

6.5

-57%

10.6

Corporate administration and support functions

-10.9

-10.0

-9%

-19.0

-20.8

9%

-42.2

Total

56.3

70.6

-20%

113.2

129.5

-13%

258.6

Press conference for analysts and media

A press conference for analysts and media, combined with a live international telephone conference, will be arranged on 19 July at 3.00 p.m. EEST at Cargotec's head office, Porkkalankatu 5, Helsinki. The event will be held in English. The report will be presented by CEO Mika Vehviläinen and Executive Vice President, CFO Mikko Puolakka. The presentation material will be available at www.cargotec.com by latest 2.30 p.m. EEST.

The telephone conference, during which questions may be presented, can be accessed with access code 673169 using the following numbers:

Cargotec (Nasdaq Helsinki: CGCBV) enables smarter cargo flow for a better everyday with its leading cargo handling solutions and services. Cargotec's business areas Kalmar, Hiab and MacGregor are pioneers in their fields. Through their unique position in ports, at sea and on roads, they optimise global cargo flows and create sustainable customer value. Cargotec's sales in 2017 totalled approximately EUR 3.2 billion and it employs over 11,000 people. www.cargotec.com